“Unequivocally not selling:” BHS accuses rival of stoking sale rumors

Compass takes the high road in response

New York /
May.May 16, 2019 03:18 PM
Bess Freedman and Robert Reffkin (Credit: Studio Scrivo)

Bess Freedman and Robert Reffkin (Credit: Studio Scrivo)

Brown Harris Stevens agents woke up Thursday to an explosive email from the firm’s top brass: Ignore the rumors. Your brokerage is not for sale.

Over the past two weeks, there’s been plenty of chatter that Terra Holdings, the parent company of BHS, was in talks to sell the 146-year-old firm. The buyer? Compass, the venture-backed unicorn which struck a deal last month to acquire Stribling & Associates, one of the few remaining independent firms in New York City.

In an attempt to dispel the buzz, BHS CEO Bess Freedman and President Hall Willkie emailed BHS’ 1,000 or so agents in New York and Florida on Thursday morning, and said the rumors were sparked by a rival seeking to sow uncertainty. Freedman and Willkie stopped short of naming the rival, however.

“We believe it [the rumor of a sale] has been effectively driven and purposely spread by a competitor to further support their unethical recruitment tactics,” they wrote in the email, which was obtained by The Real Deal. “That issue is being addressed legally.”

Sources said that in recent weeks Compass has stepped up its efforts to recruit BHS agents by urging them to join before BHS gets acquired.

In a statement, a spokesperson for Compass said the firm values its relationships with other firms and is “consistently looking for ways to partner more closely with them.”

“We don’t share negative sentiments about competitors,” Compass added, “and we choose to lead with positivity rather than negativity.”

BHS, whose brand is most associated with genteel Manhattan living, has been named as a possible acquisition target for large companies looking to enter New York, including Berkshire Hathaway HomeServices. The firm has denied entertaining any offers.

In November, Terra, which also owns Halstead Property, appointed Freedman as BHS’ first CEO. BHS came in fourth on The Real Deal‘s recent ranking of top residential firms in Manhattan, closing $1.81 billion in sell-side deals in 2018. The firm has 621 licensed agents in Manhattan, about the same as last year. Compass took third place on that same ranking with $2.01 billion in sell-side deals. Its agent count in Manhattan grew 22 percent year-over-year to 872.

Nationwide, the Softbank-backed Compass — which has raised $1.2 billion from investors to date and was most recently valued at $4.4 billion — has ramped up acquisitions in order to grow market share. In San Francisco, it picked up Paragon Real Estate Group, Pacific Union International and Alain Pinel. And here, it acquired Stribling, which has 300 agents in Manhattan and Brooklyn.

In an interview Thursday, Freedman said she felt the need to address the rumors head-on.

“We felt like we needed to really make a statement,” said Freedman, she said, classifying the other firm’s tactics as “dirty” and “unrelenting.”

“The goal is to undermine what we’re doing as a real estate firm,” she added. “We are absolutely, unequivocally not selling.”


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